NYSE:CLS is showing good growth, while it is not too expensive.

Last update: Nov 13, 2024

CELESTICA INC (NYSE:CLS) was identified as an affordable growth stock by our stock screener. NYSE:CLS is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Understanding NYSE:CLS's Growth Score

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:CLS, the assigned 7 reflects its growth potential:

CLS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 60.09%, which is quite impressive.
Measured over the past years, CLS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.61% on average per year.
Looking at the last year, CLS shows a quite strong growth in Revenue. The Revenue has grown by 17.52% in the last year.
The Earnings Per Share is expected to grow by 27.49% on average over the next years. This is a very strong growth
CLS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.25% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Valuation Analysis for NYSE:CLS

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:CLS has achieved a 6 out of 10:

CLS's Price/Earnings ratio is a bit cheaper when compared to the industry. CLS is cheaper than 72.36% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, CLS is valued a bit cheaper than 78.05% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.79, CLS is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, CLS is valued a bit cheaper than 71.54% of the companies in the same industry.
69.92% of the companies in the same industry are more expensive than CLS, based on the Price/Free Cash Flow ratio.
CLS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of CLS may justify a higher PE ratio.
A more expensive valuation may be justified as CLS's earnings are expected to grow with 27.49% in the coming years.

Understanding NYSE:CLS's Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:CLS has received a 7 out of 10:

An Altman-Z score of 3.45 indicates that CLS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.45, CLS is in the better half of the industry, outperforming 60.98% of the companies in the same industry.
CLS has a debt to FCF ratio of 2.47. This is a good value and a sign of high solvency as CLS would need 2.47 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.47, CLS is doing good in the industry, outperforming 71.54% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that CLS is not too dependend on debt financing.
Even though the debt/equity ratio score it not favorable for CLS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
The current and quick ratio evaluation for CLS is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Looking at the Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:CLS scores a 8 out of 10:

Looking at the Return On Assets, with a value of 6.36%, CLS is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
CLS's Return On Equity of 20.73% is amongst the best of the industry. CLS outperforms 92.68% of its industry peers.
CLS has a Return On Invested Capital of 13.55%. This is amongst the best in the industry. CLS outperforms 91.06% of its industry peers.
The 3 year average ROIC (8.21%) for CLS is below the current ROIC(13.55%), indicating increased profibility in the last year.
CLS has a Profit Margin of 4.08%. This is in the better half of the industry: CLS outperforms 69.11% of its industry peers.
In the last couple of years the Profit Margin of CLS has grown nicely.
With a decent Operating Margin value of 5.61%, CLS is doing good in the industry, outperforming 67.48% of the companies in the same industry.
In the last couple of years the Operating Margin of CLS has grown nicely.
In the last couple of years the Gross Margin of CLS has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of CLS for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.